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Why the Lack of Branding is Killing the Pet Industry

A brand is defined by Philip Kotler the author of Marketing Management as, “a name, term, sign, symbol, or design or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of the competitor.”

Does this sound like what you are trying to do? If you are in the pet industry and NOT selling dog or cat food then probably not. Outside of food manufacturers whose leading brands are owned by top Consumer Packaged Goods (CPG) firms, the pet industry has lagged behind other industries in terms of branding. Small to medium manufacturers of commodity toys, treats, collars and leashes have lined their pockets for years with a blatant disregard for developing a consumer brand. This worked great for the last 50 years. Manufacturers made tons of money and never invested in their brands.

This was a great strategy... until now. Pet retailers have woken up and discovered the power of private label and direct sourcing. They figured if consumers didn’t know any of the brands in their stores anyway, why don’t they just create their own brands? This is a great question. It would also lead to loyalty to their specific stores. Now retailers are taking it one step further and asking, ‘why don’t we just direct source from China and cut out the middle man?’ Now they can exceed 75% margins in even more categories. This is a great strategy for the likes of Petco and Petsmart but it is putting many pet manufacturers out of business.

Who will survive in the current pet environment? Unfortunately, only a handful of enlightened companies like Caitec with its HERO brand will change and thrive. The rest will ignore the call to create brands and fall by the wayside while pining away for the way things used to be. The Pet Industry needs to realize what the Consumer Packaged Goods industry has known forever -- if you own the consumer relationship with your brand you can control your retailers (ask Procter & Gamble who is in control). However, if the retailer owns the consumer relationship because you have no brand, they will control you. Better yet, they will bypass you and develop their own brand and put you out of business.